Non-traditional agricultural exports production and marketing (financial and economic analysis)

The evaluation sought to provide some responses to the issues arising from the mid-term evaluation, mainly related to the project"s financial sustainability. Major findings are noted below. (1) For the sample of cooperatives producing organic coffee and organic vegetables, the results of the cash flow analysis show that with the introduction of the organic production technique, these commodities obtain profits and are financially sustainable. In fact, the net present value (NPV) and the benefit/cost (B/C) ratio have been positive in all cases analyzed. (2) The project as a whole has had a positive impact on the economy, since it contributes, among other things, to exports, wages, and employment generation. (3) Other positive externalities of the project include protection of the environment, since the organic technique avoids the use of chemical pesticides and insecticides that pollute the environment. (3) The financial analysis makes clear that the organic production contributes to reducing production costs due to the low prices of organic inputs. (4) Organic production should be promoted at a national level because of its positive financial, economic, and environmental impact. (5) In order to promote diversification of exports and organic crops in El Salvador, it is necessary to improve economic and social infrastructure in the rural areas. This should include improvements in human capital formation, with education and training for the rural population to allow them to take full advantage of technical assistance and to better identify market opportunities for their crops. (6) In El Salvador it is important to promote new production, marketing, and organization approaches in the agricultural sector. Organic production offers an excellent opportunity for new crops and markets. (Author abstract, modified)